June 23, 2018
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A Costly Benefit

Maine state employees enjoy some of the best health insurance benefits available in these fiscally challenging times. No one begrudges those state workers having such great coverage. In fact, the rest of us are better off when more people have adequate access to low cost, quality health care.

But the health insurance benefits that are part of the compensation package for state workers come at a cost. With the state struggling to ratchet down expenses in the face of one of the worst recessions in generations, state workers should pick up a greater share of the cost of that benefit.

Currently, the state pays the entire premium for employees who have single health insurance coverage, and a significant portion of the premium for couples and families. Under the governor’s budget for 2010-2011 — a budget that faces an $838 million gap — single employees making more than $50,000 a year would pick up 5 percent of the cost of health insurance premiums, or about $400 a year. Single state employees making $90,000 or more would pick up 10 percent of the premium cost, or about $810.

State employees at a public hearing on the proposed change argued that they could make more money in the private sector, and that good benefits are what make working for the state attractive. That is true. Traditionally, government jobs, and jobs in public education, did not come with top salaries, and so employers sweetened the deal with good benefits.

But in recent decades, the cost of health care coverage changed from being a small fraction of the compensation package to as much as 30 percent or more. The governor’s budget plan could have spread the cost of insurance across the board, but it is a much more equitable approach to ask the higher earners to bear the burden.

Chancellor Richard Pattenaude has said the University of Maine System may have to adjust the share of the premium employees pay as the system works to reduce its costs. Public school systems around the state, as they negotiate new contracts with faculty, also should consider having employees pick up more of the cost of premiums.

If the Obama administration is successful in reforming the health insurance and health care systems nationally, and moves health insurance away from an employer-based payer, private and public employees will be better off. But until then, health insurance premiums are good places to look for savings.

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